China launches probe into Alibaba for suspected monopolistic behaviour
24 December, 2020
China has launched a study into Alibaba Group for suspected monopolistic behaviour and will summon its Ant Group to meet up in coming days, regulators said on Thursday (Dec 24), found in the most recent blow for Jack Ma's e-commerce and fintech empire.
The moves follow China's dramatic suspension previous month of Ant's planned US$37 billion initial public offering, which have been on track to be the world's largest, just two days and nights before shares were because of start trading in Shanghai and Hong Kong.
Shares found in Alibaba fell 6 % found in early Hong Kong trade.
Regulators had previously warned e-commerce giant Alibaba about the so-called "choosing 1 from two" practice under which merchants are required to sign exclusive cooperation pacts protecting against them from offering goods on rival platforms.
The Express Administration for Market Regulation (SAMR) said within an online statement that it had launched a probe in to the practice.
Financial regulators may also talk with Alibaba's Ant Group fintech affiliate on the coming days, in respect to another statement by the People's Bank of China on the subject of Thursday.
The meeting is to "guide Ant Group to implement financial supervision, fair competition and protect the legitimate rights and interests of consumers", the statement said.
Ant said it had received a find from regulators and would "comply with all regulatory requirements".
Alibaba didn't immediately react to a request for comment.
State press expressed support for the regulators.
"Fair competition is the core of the market market", while monopoly "distorts allocation of means, harms the interest of industry players and consumers, and kills technological improvement", said the People's Daily, the state newspaper of China's ruling Communist Get together.
China's net sector had benefited from the government's support for innovation, however the industry must abide by rules and laws, it added.
If "monopoly is tolerated, and companies are permitted to expand within an disorderly and barbarian manner, the industry won't develop in a wholesome, and sustainable approach", the editorial said.
Regulators have become increasingly uncomfortable with parts of Ant's sprawling empire, chiefly its most lucrative credit rating business that contributed close to 40 % of Ant's earnings in the first half of the entire year.
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